Glencore said to invest in Chinese aluminum smelter’s IPO
Glencore Plc and Hillhouse Investment Management plan to invest in Chuangxin Industries Holdings Ltd.’s upcoming initial public offering in Hong Kong, people familiar with the matter said, signaling confidence in the Chinese aluminum smelter’s prospects as the metal’s price surges.
The Swiss commodity giant and the asset manager are poised to participate as cornerstone investors — an IPO buyer guaranteed a share allocation for agreeing to hold the stock for a period of time — the people said, asking not to be identified in discussing a private matter.
China Hongqiao Group Ltd., the country’s largest private aluminum producer, is also set to be a cornerstone, the people said. The three firms and other cornerstone investors may buy about half of the deal, they said.
Based in China’s Inner Mongolia, Chuangxin plans to start taking investor orders as soon as Friday for an IPO that may fetch about $700 million.
Chinese aluminum smelters, producing half of the world’s primary aluminum, are enjoying elevated profitability helped by a government-imposed capacity ceiling and resilient demand from the renewable energy sector. Aluminum has also been one of the strongest performers on the London Metal Exchange in recent months, reaching a three-year high last week.
Deliberations are ongoing, and details of the deal including the investments might change, the people added.
A representative for Glencore had no immediate comment. A China Hongqiao representative declined to comment. Chuangxin and Hillhouse didn’t respond to requests for comment.
Chuangxin counts on the production of primary aluminum and alumina for much of its business. Its biggest customer is Shanghai-listed Innovation New Material Technology Co., which is headed by Chuangxin’s chairman, Cui Lixin, according to a filing with the Hong Kong stock exchange.
Hong Kong listings are set to close 2025 at a four-year high, with proceeds potentially topping $40 billion, according to Bloomberg Intelligence’s estimate. But some listings have recently flopped on their debuts, signaling that investors are becoming increasingly skeptical after a banner year.
China International Capital Corp. and Huatai Securities Co. are arranging Chuangxin’s IPO.
(By Dave Sebastian)
Morgan Stanley questioned by US House panel over Zijin Gold IPO in Hong Kong
Morgan Stanley’s underwriting of Zijin Gold International’s Hong Kong IPO placed it and its US investors at risk of regulatory, financial and reputational harm, a US House of Representatives committee told the bank on Thursday.
Zijin Gold is a subsidiary of Zijin Mining Group, a global mining company based in China that is on a US government list of companies whose imports are banned over alleged human rights abuses involving Uyghurs.
In September, Morgan Stanley assisted with Zijin Gold’s IPO to help its parent company raise funds by selling its non-Chinese gold mining assets and listing them on the Hong Kong Stock Exchange, the House’s select committee on China said. That raised questions of whether it helped Zijin Mining evade the US prohibitions, according to the committee.
Morgan Stanley declined to comment. Zijin Gold and Zijin Mining did not immediately respond to requests for comment.
“When US financial institutions engage with Chinese firms linked to Uyghur forced labor, they undermine the US government’s goal of deterring forced labor globally,” Representative John Moolenaar, the committee’s chair, wrote in a letter to Morgan Stanley CEO Ted Pick.
In January, Zijin Mining was added to the Uyghur Forced Labor Prevention Act Entity List, which restricts imports tied to what the US says is an ongoing genocide of minorities in China’s western Xinjiang region.
US officials say Chinese authorities have established labor camps for Uyghurs and other Muslim minority groups in Xinjiang. Beijing denies any abuses.
In the letter, Moolenaar seeks documents and communications about Morgan Stanley’s involvement in the public offering related to the company’s links to the Chinese government, Chinese Communist Party, military, and human rights abuses. He asked for the information by November 27.
The letter is the latest action by his committee on US financial institutions’ involvement in underwriting IPOs of Chinese companies with ties to the Chinese military or to illegal labor practices.
In July, the committee subpoenaed documents from JPMorgan and Bank of America over their roles in underwriting the Hong Kong IPO of China’s CATL, the world’s largest electric vehicle battery maker. CATL has been designated a Chinese military company by the US Department of Defense.
(By Karen Freifeld and Kanishka Singh; Editing by Jamie Freed)
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